Qcr Holdings, Inc. · NASDAQ:QCRH

Qcr — IPO Roadshow (February 2019)

49 slides from Qcr's IPO roadshow presentation, Feb 7, 2019

1. Slide 1: Forward-Looking Statements

   FORWARD-LOOKING STATEMENTS This document contains, and future oral and written statements of QCR Holdings (the “Company”) and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, res

2. Slide 2: Presenters

   Presenters May 2019 services Effective May 23, 2019, Larry J. Helling will become Chief Executive Officer of the Company and Todd A. Gipple will become President, in addition to his current roles of Chief Operating Officer and Chief Financial Officer a relationship driven organization.® 3 Source: S&

3. Slide 3: Offering Overview

   Offering Overview a relationship driven organization.® 4 (1) A rating is not a recommendation to buy, sell, or hold securities. Ratings may be subject to revision or withdrawal at any time by the assigning rating organization. Each rating agency has its own methodology for assigning ratings and, acc

4. Slide 4: Offering Overview

   Offering Overview Swe SCRUM OCR Holdings, Inc. / NASDAQ / QCRH Security Offered Holding Company subordinated debt Security Rating” BBB- by Kroll Bond Rating Agency Format SEC Registered Term 10-year Optional Redemption Non-call for 5 years. Callable on any interest payment date at par thereafter Spe

5. Slide 5: QCR Holdings' Mission, Vision and Values

   QCR HOLDINGS’ MISSION, VISION AND VALUES OUR MISSION OUR VISION OUR VALUES – LIVED AND EXPECTED OF ALL AT QCR a relationship driven organization.® 6 Collaboration Innovation Achievement Personal Responsibility Fulfillment QCR Holdings will be ranked in the top quartile ROAA of peer firms by 2020 and

6. Slide 6: Corporate Overview

   CORPORATE OVERVIEW Headquartered in Moline, IL and operating five locally managed and governed charters in three states, supported by a centralized operational team Lines of Business: Full-service commercial and consumer banking Correspondent banking Commercial lease financing Trust and wealth manag

7. Slide 7: Local charters provide a competitive advantage

   a relationship driven organization.® Local charters provide a competitive advantage Strong, centralized risk management function Efficient centralized group operations Strong credit and asset quality Consistent adjusted net income growth High touch service approach Serving attractive Midwest markets

8. Slide 8: The Value of Separate Charters

   THE VALUE OF SEPARATE CHARTERS Managed and governed by local veteran bankers and boards with strong community ties and expertise High touch service delivered by knowledgeable professionals Strong community involvement with high employee participation Local decisions and solutions Local autonomy has

9. Slide 9: Unique and Diversified Products and Services

   UNIQUE AND DIVERSIFIED PRODUCTS AND SERVICES QCR Holdings Business Lines floating rate swaps market sales income: $11.2M 2018 Noninterest Income: $41.5mm 23% of Total 2018 Revenue 2018 Net Interest Income: $142.4mm 77% of Total 2018 Revenue a relationship driven organization.® 10 Source: Company doc

10. Slide 10: Attractive Markets of Operation

    ATTRACTIVE MARKETS OF OPERATION International headquarters for Deere & Company Ranked 18th in the nation for high-tech job growth (2010 – 2011) Top 10 Advanced Manufacturing Community Davenport-Moline-Rock Island, IA-IL 1 1,284 15.6 Des Moines-West Des Moines, IA 8 596 3.2 International headquarters

11. Slide 11: Strategies to Continue to Drive Shareholder Value

    STRATEGIES TO CONTINUE TO DRIVE SHAREHOLDER VALUE Continue strong organic loan and lease growth to maintain loans and leases to total assets ratio in the range of 73-78% (75% as of 12/31/18) Maintain focus on growing core deposits to maintain reliance on wholesale funding at less than 15% of assets

12. Slide 12: Market Opportunities and Acquisition Strategy

    MARKET OPPORTUNITIES AND ACQUISITION STRATEGY Fragmented markets and ongoing consolidation creates opportunity Almost 1,100 community banks are headquartered in the four-state region - 64% are between $100 million and $1.0 billion in assets(1) Approximately 240 community banks are headquartered in t

13. Slide 13: Market Opportunities and Acquisition Strategy

    MARKET OPPORTUNITIES AND ACQUISITION STRATEGY Fragmented markets and ongoing consolidation creates opportunity Almost 1,100 community banks are headquartered in the four-state region — 64% are between $100 million and $1.0 billion in assets") * Approximately 240 community banks are headquartered in

14. Slide 14: A Consistent Track Record of Asset Growth

    A CONSISTENT TRACK RECORD OF ASSET GROWTH Total Consolidated Assets $ in billions $4.9 2013 2014 2015 2016 2017 2018 a relationship driven organization.® 15 Source: S&P Global Market Intelligence and Company documents. Recent Acquisitions (Assets at acquisition date ($ Millions)): 2013: Community Na

15. Slide 15: Deposit Growth Driven by Core Deposits

    DEPOSIT GROWTH DRIVEN BY CORE DEPOSITS Core Deposits(1) Represent Approximately 93% of Total Deposits as of 12/31/18 $ in billions $4.0 $0.1 $0.1 $1.7 $0.1 $1.6 $0.1 $0.1 2013 2014 2015 2016 2017 2018 Noninterest-bearing Deposits Interest-bearing Deposits Time Deposits Brokered Deposits a relationsh

16. Slide 16: Cost of Deposits Over Time

    COST OF DEPOSITS OVER TIME Historical Cost of Deposits Quarterly Deposit Beta: 9.3% 23.8% 42.4% 9.2% 10.9% 43.1% 84.6% 55.1% 73.4% 3.00% 2.50% 2.50% 2.25% 2.00% 1.50% % 1.06% 1.01% 1.00% 0.80% 1.00% 66% 0.69% 0.91% 0.78% 0.50% 0.33% 0.28% 0.00% Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 F

17. Slide 17: Loan Growth Driven by Commercial Lending

    LOAN GROWTH DRIVEN BY COMMERCIAL LENDING Commercial Loans(1) Represent Approximately 89% of the Loan Portfolio as of 12/31/18 $ in billions(2) $3.7 $0.1 $1.6 $0.1 $1.5 $0.2 $0.1 $0.2 $0.1 2013 2014 2015 Commercial RE 2016 Direct Fin. Leases 2017 Residential RE 2018 Consumer & Other Commercial & Indu

18. Slide 18: Asset Quality

    ASSET QUALITY 2.00% 1.50% $20.0 a relationship driven organization.® 19 Source: S&P Global Market Intelligence and Company documents. $ in millions $60.0 2.50% $50.0 $49.0 $40.0 $30.0 1.00% $10.0 0.50% $0.0 0.00% 2013 2014 2015 2016 2017 2018 Classified Loans NPA's / Assets (%) $43.5 0.82% $43.7 1.2

19. Slide 19: Strong Credit Culture Supported by High Levels of Reserves

    STRONG CREDIT CULTURE SUPPORTED BY HIGH LEVELS OF RESERVES Reserves / Loans (%) Reserves / NPLs (%) Amount of remaining loan discount ($MM): 1.80% 320% $0.7 $10.1 $8.1 $11.6 240% 1.35% 160% 0.90% 0.45% 80% 0% 0.00% (1) 2018 2018 (1) 2015 2016 QCRH 2017 Proxy Peers 2015 2016 2017 Proxy Peers QCRH a r

20. Slide 20: Capital Ratios

    CAPITAL RATIOS The following illustrates the pro forma impact of a $50 million subordinated debt raise on the Company’s consolidated capital ratios(1) 12.1% TCE / TA Tier 1 Leverage CET1 Tier 1 Capital Pro Forma 9/30/18 (1) Total Capital 12/31/17 9/30/18 a relationship driven organization.® 21 Sourc

21. Slide 21: Strong Revenue Growth and Attractive Mix

    STRONG REVENUE GROWTH AND ATTRACTIVE MIX $ in millions Y-o-Y Revenue Growth: 25.5% Key Components of Fee Income: $183.9 • Wealth Management ($4.3 billion in assets under administration as of 12/31/18) • Correspondent banking (190 relationships as of 12/31/18) • SBA & USDA guaranteed loan sales • Swa

22. Slide 22: Consistent Improvement in Shareholder Returns

    CONSISTENT IMPROVEMENT IN SHAREHOLDER RETURNS Adj. EPS(2) Y-o-Y Adj. Net Income Growth: Net Income(1) $ in millions 27.7% $46.4 2013 2014 2015 2016 2017 2018 23 Source: Company documents. (1) Adjusted net income to common shareholders (non-GAAP) – see appendix slide 47 for reconciliation of GAAP net

23. Slide 23: Historical Profitability Metrics

    HISTORICAL PROFITABILITY METRICS Adjusted ROAA (%)(1) 1.50% 1.00% 0.50% 0.00% 2013 2014 2015 2016 2017 2018 Tax Equivalent Net Interest Margin (%)(2) Efficiency Ratio (%)(3) 4.40% 85.0% 3.62% 3.60% 70.0% 3.03% 55.0% 2.80% 2.00% 40.0% 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 QCRH A

24. Slide 24: QCRH Financial Targets

    QCRH FINANCIAL TARGETS 12/31/2018 Stable within target range 2018 impacted by tax 2018 wealth mgmt. income ~$13.6MM decrease Q-o-Q a relationship driven organization.® 25 Source: S&P Global Market Intelligence and Company documents. Asset Quality Income Statement Balance Sheet 0.56% NPAs / Assets 0.

25. Slide 25: QCRH Financial Targets

    Balance Sheet rd g 8 Asset Quality QCRH FINANCIAL TARGETS Streams Sauce SEP Galea etre and Company cones Loans / Assets f Wholesale Funding 7 NIM (Tax Equivalent) had Adjusted ROAA x Fee Income fd Net Charge-offs f NPAs / Assets f 73% - 78% of total assets Less than 15% of funding Greater than 3.65%

26. Slide 26: Historical Interest Coverage

    HISTORICAL INTEREST COVERAGE Historical Interest Coverage 27 Source: S&P Global Market Intelligence and Company documents. Note: Short term borrowings include FHLB advances. (1) Assumes a $50 million transaction with an initial fixed interest rate of 5.50% for illustrative purposes only. Net proceed

27. Slide 27: Historical Financials

    HISTORICAL FINANCIALS Balance Sheet: Total Assets 2,525 2,593 3,302 3,983 4,950 Deposits 1,680 1,881 2,669 3,267 3,977 Profitability: Net Income as Reported 15.0 16.9 27.7 35.7 43.1 Net Interest Margin (TEY) 3.15 3.37 3.75 3.78 3.62 Asset Quality: NPAs / Total Assets 1.31% 0.74% 0.82% 0.81% 0.56% Re

28. Slide 28: Securities & Funding

    SECURITIES & FUNDING Securities Portfolio (as of 9/30/18) Duration: 7.0 years MRQ Yield (TEY): 3.55% MRQ Yield (GAAP) 3.02% Other Securities U.S. $5.2M 1% Governm ent-Spons ored Agencies $36.5M 6% Mortgage-Back d Securities $155. M 24% Municipal Securities $446.4M 69% 29 Source: S&P Global Market In

29. Slide 29: Decentralized Functions Structure with Centralized Risk

    DECENTRALIZED FUNCTIONS STRUCTURE WITH CENTRALIZED RISK Local Lending with Central Policy-Making Multi-charter strategy allows for the retention of local relationship officers and loan decision making authority Centralized credit policy-making ensures corporate best practices and maintains the globa

30. Slide 30: History of Expanding into Attractive Markets

    HISTORY OF EXPANDING INTO ATTRACTIVE MARKETS WISCONSIN 2018 Springfield Bancshares, Inc. merger Locations Share Bates Companies acquisition Locations Deposits Share 2017 Guaranty Bank & Trust acquisition IOWA Locations Share 2013 Community National Bank acquisition Locations Deposits Share 2016 Comm

31. Slide 31: Quad City Bank & Trust

    QUAD CITY BANK & TRUST Quad Cities Highlights International Headquarters for Deere & Company The Rock Island Arsenal is the largest government-owned military weapons manufacturing arsenal in the United States John H. Anderson, President & CEO Assets: $1.58 Billion (as of 9/30/18) Population: 382,013

32. Slide 32: Deposit Market Share - Quad City Bank & Trust

    DEPOSIT MARKET SHARE - Quad City Bank & Trust MSA Share 2. Wells Fargo & Co. 12 1,280.6 15.58% 3. Blackhawk Bancorp. Inc. 17 964.4 11.73% 4. U.S. Bancorp 11 653.3 7.95% 5. Triumph Bancorp Inc. 10 478.9 5.82% 6. Orion Bancorp. Inc. 8 383.0 4.66% 7. First Midwest Bancorp Inc. 5 352.5 4.29% 8. AmBank H

33. Slide 33: Cedar Rapids Bank & Trust

    CEDAR RAPIDS BANK & TRUST Cedar Rapids Highlights Ranked #15 Most Popular Cities in America to Relocate to (2018) International Headquarters for Collins Aerospace Downtown Revitalization – Double Tree by Hilton Cedar Rapids Convention Complex $144MM, 2 year project resulted in 100,000 sq/ft conventi

34. Slide 34: Deposit Market Share - Cedar Rapids Bank & Trust

    DEPOSIT MARKET SHARE - Cedar Rapids Bank & Trust MSA Share 2. U.S. Bancorp 9 788.9 13.35% 3. Wells Fargo & Co. 9 693.5 11.74% 4. Neighbor Insurance Agency Inc. 9 619.4 10.48% 5. Hills Bancorp. 7 438.4 7.42% 6. BTC Financial Corp. 3 262.2 4.44% 7. Dunn Investment Co. 5 201.8 3.42% 8. Country Bancorp.

35. Slide 35: Rockford Bank & Trust

    ROCKFORD BANK & TRUST Rockford Highlights Top 15 “Best Places to Move to in the U.S. (Before They Get Too Crowded)” Mercy Health System constructing a $485 million ‘destination’ medical center scheduled to open in 2019 AAR (largest aircraft maintenance company in North America, and third largest in

36. Slide 36: Deposit Market Share - Rockford Bank & Trust

    DEPOSIT MARKET SHARE Rockford Bank & Trust – MSA Share 1. Midland States Bancorp Inc.** 19 1,087.5 17.68% 2. JPMorgan Chase & Co. 6 702.7 11.42% 3. Associated Banc-Corp 6 669.1 10.88% 4. Bank of Montreal 11 595.4 9.68% 5. Heartland Financial USA Inc. 4 481.4 7.83% 6. Blackhawk Bancorp Inc. 5 415.1 6

37. Slide 37: Community Bank & Trust

    COMMUNITY BANK & TRUST Waterloo/Cedar Falls Highlights John Deere investing $40MM in its tractor testing labs, adding 62,000 sq/ft of additional space John Deere completed $150MM modernization of John Deere Foundry – total investment by Deere in Waterloo in the last decade equals $1B Stacey J. Bentl

38. Slide 38: Deposit Market Share - Community Bank & Trust

    DEPOSIT MARKET SHARE – Community Bank & Trust MSA Share 1. FSB Financial Services Inc. 8 702.8 19.61% 2. Lincoln Bancorp 5 411.4 11.48% 3. U.S. Bancorp 6 352.1 9.82% 4. First of Waverly Corp. 5 318.1 8.88% 5. PSB Corp. 5 274.5 7.66% 6. Wells Fargo & Co. 3 236.3 6.59% 7. GNB Bancorp. 3 182.8 5.10% 8.

39. Slide 39: Community State Bank

    COMMUNITY STATE BANK Ankeny Highlights Population: 64,060 Median Household Income: $89,153 Cost of Living Index (US =100): 96.1 Median Home Value: $212,100 Households: 24,248 Median Age: 35 From 2016 to 2017 Ankeny was the fourth-fastest growing city in the U.S. More people are moving to Ankeny than

40. Slide 40: Deposit Market Share - Community State Bank

    DEPOSIT MARKET SHARE – Community State Bank MSA Share 1. Wells Fargo & Co. 18 2,937.4 15.73% 2. BTC Financial Corp. 19 2,638.3 14.13% 3. Principal Bank 1 2,462.9 13.19% 4. West Bancorp. Inc. 8 1,626.3 8.71% 5. U.S. Bancorp 15 1,188.6 6.36% 6. Bank of America Corp. 3 1,019.8 5.46% 7. Great Western Ba

41. Slide 41: SFC Bank

    SFC BANK Springfield Highlights Population: 167,653 Median Household Income: $38,489 Cost of Living Index (US =100): 86.2 Median Home Value: $109,500 Households: 74,248 Median Age: 35 25% population growth from 2000-2017 or 1.5% annual population growth Springfield’s gross metro product has grown mo

42. Slide 42: Deposit Market Share - SFC Bank

    DEPOSIT MARKET SHARE SFC Bank – MSA Share 1. Great Southern Bancorp Inc. 20 1,337.0 13.48% 2. Commerce Bancshares Inc. 11 1,229.4 12.39% 3. Central Banco. Inc. 21 1,117.4 11.26% 4. Guaranty Federal Bancshares Inc. 10 612.4 6.17% 5. Bank of America Corp. 4 570.7 5.75% 6. OakStar Bancshares Inc. 5 540

43. Slide 43: Wealth Management

    WEALTH MANAGEMENT $4.3 $2.2 2013 2014 2015 2016 2017 2018 Trust AUA Wealth AUM Y-o-Y Revenue Growth: 21.5% $13.4 $7.5 2013 2014 2015 2016 2017 2018 Trust Department Investment Advisory a relationship driven organization.® 44 Source: Company documents. $11.1 $4.7 $8.5 $9.1 $9.2 $3.9 $3.0 $3.0 $8.7 $2

44. Slide 44: Correspondent Banking, Swaps & Loan Sales

    CORRESPONDENT BANKING, SWAPS & LOAN SALES 172 181 187 190 Relationships $417 $412 190 relationships in IL, IA and WI with 2015 $ millions 2016 2017 2018 Average Deposits Loans $ millions $11.2 while generating floating rate exposure 2015 2016 2017 2018 Swap Fees GO S - G ovt. Guaranteed a relationsh

45. Slide 45: GAAP to Non-GAAP Reconciliations

    GAAP TO NON-GAAP RECONCILIATIONS For the Years Ended December 31, ($ in millions) NIM (TEY) 2013 2014 2015 2016 2017 2018 NIM (TEY) (Non-GAAP) * 3.03 % 3.15 % 3.37 % 3.75 % 3.78 % 3.62 % EFFICIENCY RATIO Noninterest income (GAAP) 26.8 21.3 24.4 31.0 30.5 41.5 a relationship driven organization.® 46

46. Slide 46: GAAP to Non-GAAP Reconciliations (cont.)

    GAAP (dollars in thousands) TO NON-GAAP RECONCILIATIONS (CONT.) For the Years Ended December 31, ADJUSTED NET INCOME 2013 2014 2015 2016 2017 2018 Net income (GAAP) Less nonrecurring items (post-tax)(1): Income: Securities gains, net Bargain purchase gain on Community National Bank acquisition Gains

47. Slide 47: GAAP to Non-GAAP Reconciliations (cont.)

    GAAP TO NON-GAAP RECONCILIATIONS (CONT.) As of and for the Year ended, December 31, ($ in m illions, except per share data) Tangible Common Equity Less: Preferred equity Less: Goodwill and intangible assets 29.8 5.1 - 4.9 - 4.7 - 22.5 - 37.4 - 95.3 Tangible book value per share $14.29 $17.50 $18.81

48. Slide 48: www.qcrh.com

    www.qcrh.com © Copyright 2019 QCR Holdings All Rights Reserved

49. Slide 49: QCR Holdings, Inc.

    OCR HOLDINGS, INC. 3551 Seventh Street Moline, IL 61265 www.qerh.com © Copyright 2019 QCR Holdings All Rights Reserved

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